Providing Equitable Relief
Oregon is committed to providing equitable relief through the Homeowner Assistance Fund programs. Pursuing an equitable recovery from the coronavirus pandemic is a legal requirement for the program and a policy commitment made by the State of Oregon and Oregon Housing and Community Services.
Pursuant to the American Rescue Plan Act and U.S. Treasury guidance, 60% of assistance funds disbursed must be provided to homeowners at or below 100% of the area median income or 100% of the median income for the United States, whichever is greater. Further, assistance provided to homeowners with incomes above those levels – and up to 150% of the area median income – must be prioritized for socially disadvantaged individuals.
For the Homeowner Assistance Fund, the U.S. Treasury defines socially disadvantaged individuals as:
Those whose ability to purchase or own a home has been impaired due to diminished access to credit on reasonable terms as compared to others in comparable economic circumstances, based on disparities in homeownership rates in the HAF participant’s jurisdiction as documented by the U.S. Census. The impairment must stem from circumstances beyond their control.
Socially disadvantaged individuals include:
- (1) member of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society,
- (2) resident of a majority-minority Census tract,
- (3) individual with limited English proficiency,
- (4) resident of a U.S. territory, Indian reservation, or Hawaiian Home Land, or
- (5) individual who lives in a persistent-poverty county, meaning any county that has had 20% or more of its population living in poverty over the past 30 years as measured by the three most recent decennial censuses.
Preventing foreclosures and displacement also aligns with the agency’s mission to provide stable and affordable housing so that Oregonians may live free from poverty and pursue prosperity. The Homeowner Assistance Fund programs will further Oregon’s Statewide Housing Plan goals and the explicit priorities for equity and racial justice, homeownership, and rural communities. Beyond the legal requirements, promoting an equitable recovery for low- and moderate-income Oregon homeowners is a mission opportunity that we hope the Oregon Homeowner Assistance Fund will help achieve.
When the HAF program was in full operation, OHCS strived to meet these goals both because they were statutory requirements and because of the importance of an equitable recovery.
Importance of an Equitable Recovery
The economic implications of the coronavirus pandemic have reached far and wide. When President Joe Biden signed into law the American Rescue Plan Act, setting aside funds for the Homeowner Assistance Fund, 628 Oregon homeowners (0.11% of all Oregon homeowners) were in foreclosure and 14,225 (2.49%) were 90+ days delinquent on their mortgages. Based on available data from multiple sources, stakeholder engagement, and public participation, Oregon Housing and Community Services developed a needs analysis for Oregon homeowners, which served as the basis for decisions made developing Oregon’s Homeowner Assistance Fund programs.
Most Oregon homeowners have incomes above 100% of area median family income, including 69% of Asian homeowners and 64% of white homeowners. However, only 53% of Black or African American, 58% of American Indian or Alaska Native, and 52% of Latino/a/x homeowners are above 100% area median income. In many locations, the disparities increase. In Multnomah County, 44% of Black or African American homeowners earn less than 80% of the area median income. Homeowners of color are more likely to be employed in the service industry, which is known for low wages and major job losses during the pandemic. Nationally, 17% of Black homeowners, 16% of Latino/a/x homeowners, and 16% of Asian homeowners fell behind on their mortgages due to lost income. Low-income homeowners, particularly those of color, are more likely to be in arrears and to have fewer resources to pay off those arrears.
Low-income homeowners are also more likely to be cost-burdened, meaning their housing costs take up a larger proportion of their gross income. For example, a household with $1,000/month in housing costs and $2,000/month in income has a 50% cost burden while a household with $4,000/month in income has a 25% cost burden. Cost-burdened homeowners have fewer funds available to endure and recover from a financial crisis, and fewer opportunities to qualify for a viable payment plan or modification to cure their arrears. Cost-burden data also reveals a racial disparity: all racial groups are similarly cost-burdened at various income levels, except for Black and Latino/a/x homeowners, who have higher cost burdens.
Winding Down Oregon’s HAF Program
As the program winds down, HAF intake partners will be able to submit HAF applications on behalf of homeowners who are in foreclosure. A homeowner is in foreclosure if one of the following situations applies.
- Nonjudicial Foreclosure. You received a Notice of Sale with a scheduled sale or auction date, sent by a third-party trustee or law firm.
- Judicial Action. You were served with a summons and complaint for foreclosure, replevin of a manufactured home, forfeiture of a land sale contract, or eviction from a manufactured home park.
- Property Tax Foreclosure Redemption Period. For two years after the homeowner’s county completed a tax lien foreclosure, homeowners are in the property tax redemption period. The redemption period is the amount of time allowed to pay off back taxes, plus interest and fees. It is the time between a county tax foreclosure and loss of the property to the county. In rare cases, HAF can help a homeowner redeem the property from the county.
Oregon recognizes it will not be able to provide all eligible homeowners with HAF assistance. We interpret foreclosure and displacement avoidance to be the top priority of the American Rescue Plan Act and the U.S. Treasury guidance. This interpretation is in line with the agency’s mission and values, the Statewide Housing Plan, and Oregon’s recovery framework. We believe that homeowners in or approaching foreclosure have most likely exhausted their other options. Therefore, the agency will implement its Homeowner Assistance Fund programs using foreclosure and displacement avoidance as the top priority.
Homeowners in foreclosure should work with their HAF intake partner and legal aid attorneys to help avoid foreclosure.